Maryland's Public Mental Health System began on July 1, 1997. On that date Maryland initiated a fee-for-service managed care model for the delivery of public mental health services. The Mental Hygiene Administration is the State public mental health authority and oversees the Public Mental Health System as a whole. Core Service Agencies are the local public mental health authorities and implement the Public Mental Health System in each political subdivision in Maryland. Value Options is the Administrative Services Organization that authorizes care and pays claims on behalf of the Mental Hygiene Administration and Core Service Agencies.

Before July 1, 1997, mental health services in Maryland were grant-funded and primarily offered through local Health Departments. During the late 1980s and throughout the 1990s, private provider organizations began taking on additional responsibilities for the delivery of mental health services for uninsured consumers. Most Health Departments closed their mental health clinics.

Most of the public mental health services are paid for by Medicaid, a program for low income uninsured consumers jointly funded by the United States Government and the State of Maryland. Maryland provides some additional funding beyond that which the federal government provides to increase the array of services and eligibility for those services. Services to Medical Assistance (Maryland's Medicaid Program) consumers is free-of-charge. Service recipients in the Public Mental Health System must meet the following eligiblity criteria for most services:

have either Medical Assistance or Primary Adult Care (PAC)

meet selected other criteria:

have been in a Medical Assistance-funded psychiatric unit of a general hospital within the past three months,